Financial Presentation for the year ended March 31, 2011 (Held on April 28, 2011) President and Representative Director, Tetsuo Kuba < P.1: Financial Results - Comparison with Year ended March 31, 2010 - > Page one shows consolidated financial results for the year ended March 31, 2011(“fiscal 2011”) compared with those of the year ended March 31, 2010 (“fiscal 2010”). As you can see at the bottom of this slide, average exchange rates for fiscal 2011 were ¥86 to the U.S. dollar, marking appreciation of ¥7, and ¥113 to the Euro, marking appreciation of ¥18, compared with fiscal 2010. As a result, net sales and pre-tax income for fiscal 2011 were down by approximately ¥68 billion and ¥28 billion, respectively, compared with fiscal 2010. Nonetheless, Kyocera posted significant increases in sales and profit relative to fiscal 2010, as you can see in the table, due primarily to recovery in demand spurred by expanded production activities in key markets and to enhanced profitability in each reporting segment. Net sales for the fiscal 2011 increased by 18.0% compared with fiscal 2010. Profit from operations, pre-tax income and net income attributable to shareholders of Kyocera Corporation for fiscal 2011 significantly increased by around 2.4, 2.8 and 3 times compared with fiscal 2010. Kyocera has worked to comprehensively reduce costs and improve productivity since the financial crisis in the year ended March 31, 2009, and I believe these efforts have borne fruit along with expansion of production quantity as demand recovers. In fiscal 2011 we made aggressive investments to increase production capacity, notably in the Components Business, in order to meet strong demand. As a result, capital expenditures for fiscal 2011 increased by 86.6% compared with fiscal 2010 to ¥70.7 billion. Please note that although production activities were temporarily stopped at Kyocera Group production sites located in the Tohoku and Kanto regions due to the disaster, all these sites resumed production by March 22, 2011. As of today, production utilization in these sites has already returned to the level before the earthquake and there was no significant impact on business performance for fiscal 2011. < P2: Sales by Reporting Segment - Comparison with Year ended March 31, 2010 - > On page 2, you can see sales by reporting segment for fiscal 2011 in comparison with fiscal 2010. Kyocera achieved increases in sale in every reporting segment for fiscal 2011 compared with fiscal 2010. 1
< P3: Operating Profit by Reporting Segment - Comparison with Year ended March 31, 2010 - > On page 3 you can see operating profit by reporting segment for fiscal 2011. Operating profit for fiscal 2011 also increased in every reporting segment in line with sales growth compared with fiscal 2010. I will explain the reasons for this on the following pages. < P.4: Summary of FY3/2011 Results (1) Components Business > Sales and operating profit for the Components Business increased significantly by 25.6% and 2.4 times compared with fiscal 2010, respectively. The first reason for the significant increase in sales and profit is the favorable market situation. Demand for components used in digital consumer equipment, industrial machinery and automotive markets drove the sales growth. The second reason is the increased production capacity for the growing business. To meet this strong demand, we increased production capacity in all the businesses in the Components Business and were able to translate this into higher sales and profit. The third reason is the outcome of our efforts to reduce costs and boost productivity, tackled after the financial crisis. We posted a significant increase in profit through efforts to reduce costs and boost productivity in Kyocera Group along with the effect of sales growth. As a result, the operating profit ratio for the Components Business overall reached to 17.4%, largely surpassed that of the year ended March 31, 2008 (“fiscal 2008”), when it was before the financial crisis. < P.5: Summary of FY3/2011 Results (2) Equipment Business > In the Equipment Business, sales increased by ¥10.3% and operating profit increased by 3.8 times in fiscal 2011 compared with fiscal 2010. Notably, an improvement in performance in the Telecommunications Equipment Group made a significant contribution to growth in sales and profit. The effects of structural reforms executed in the Telecommunications Equipment Group in fiscal 2010 were evident in fiscal 2011 results. Specifically, integrating the development system into Japan enabled us to launch a series of new products in Japan and overseas and augment our product line-up, together with the strengthening of marketing capabilities by integrating sales sites in North America were the factors for the substantial increase in sales in fiscal 2011 compared with fiscal 2010. Operating profit increased considerably compared with fiscal 2010. In addition to the sales 2
growth and the effects of structural reforms, one-time loss of approximately ¥9.0 billion relating to Willcom Inc., posted in fiscal 2010 was another factor for improved profitability. Regarding the year-end dividend, in light of our dividend policy, we propose year-end dividend of ¥70 per share, ¥10 yen increase compared with the forecast, due to higher net income than the forecast. The total annual dividend will be ¥130 per share. < P.6: Business Trends by Reporting Segment for FY3/2011 (1) - Fine Ceramic Parts Group - > Sales for fiscal 2011 increased by 43.8% compared with fiscal 2010 and operating profit turned black from the loss in fiscal 2010 with substantial increase of ¥12.8 billion compared with fiscal 2010. The operating profit ratio was improved to 15.7%. Both sales and operating profit increased significantly in fiscal 2011 relative to fiscal 2010, due to a recovery in demand for components used in industrial machinery such as semiconductor fabrication equipment parts, demand for automotive parts such as piezoelectric stacks and glow plugs increased in line with proliferation of diesel cars in Europe. <P.7: Business Trends by Reporting Segment for FY3/2011 (2) - Semiconductor Parts Group - > Sales and operating profit for fiscal 2011 increased by 24.3% and by 116.6%, respectively, compared with fiscal 2010. The significant increases in sales and profit in this reporting segment are attributable to several factors. Besides growth in production of digital consumer equipment such as mobile phone handsets, demand expanded for advanced equipment fitted with more components per unit than conventional models, with an example being smartphones contributed demand increase for ceramic packages for crystal and SAW devices, and for CMOS/CCD image sensors. In organic packages, sales and profit were also up substantially in line with growth in demand for ASIC packages used in servers and routers. As a result, the operating profit ratio in this reporting segment reached to 21.4%. < P.8: Business Trends by Reporting Segment for FY3/2011 (3) - Applied Ceramic Products Group - > In this reporting segment, sales and operating profit for fiscal 2011 increased by 25.9% and by 46.3%, respectively, compared with fiscal 2010. 3
In the solar energy business, despite the impact of the yen’s appreciation and selling price erosion, we were able to translate demand increase mainly in Japan and the United States into sales growth. Kyocera increased production capacity in accord with start-of-year plans and production volume amounted to 600MW in fiscal 2011. In the cutting tool business, sales increased in line with expanded production activities in the automotive industry. Kyocera achieved increases in sales and profit overall in this reporting segment by expanding sales and reducing costs in each business. < P.9: Business Trends by Reporting Segment for FY3/2011 (4) - Electronic Device Group - > In this reporting segment, sales for fiscal 2011 increased by 21.4% and operating profit substantially increased by 214.8% compared with fiscal 2010. Demand for all products such as capacitors, crystal related products and connectors increased significantly in line with rising demand for digital consumer equipment. In addition, we expanded thin-film device business, especially LCD business, which also contributed to increases in sales. Operating profit was up more than 3 times compared with fiscal 2010 resulting from efforts to comprehensively reduce costs and enhance productivity. The operating profit ratio was improved to 17.2%. < P.10: Business Trends by Reporting Segment for FY3/2011 (5) - Telecommunications Equipment Group - > In this reporting segment, sales for fiscal 2011 increased by 19.1% and operating profit turned black from the loss in fiscal 2010 with significant increase of ¥16.8 billion compared with fiscal 2010. In overseas markets, sales increased due to favorable sales of handsets of dissemination model and contribution from augmentation of our product line-up through the launch of new products, in addition to gained share in carriers. In the Japanese market, in addition to solid sales of feature phones including basic mobile phone handsets, we increased sales volume of PHS handsets thanks to measures to boost sales by the carrier. Operating profit was up significantly due to the sales growth and the effects of structural reforms, in addition to a record of one-time loss of approximately ¥9.0 billion relating to Willcom Inc. in fiscal 2010. 4
Recommend
More recommend
